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Free Earnings Trade of the Week: CarMax Inc. (KMX) – Reports Before The Markets Open 4/7/16

CarMax Inc. (KMX) is scheduled to report earnings before the markets open on Thursday, 4/7/16.

Last quarter, the stock had the following price movement after reporting earnings:

Dec 18, 2015

53.44
53.90
50.57
53.49
20,119,800
53.49

Dec 17, 2015

58.81
59.16
57.11
57.15
4,757,100
57.15

While the stock moved down a decent amount last quarter, it wasn’t too significant. Even if the stock were to repeat the same movement this quarter, the Neutral Calendar Spread strategy will do well. The current Implied Volatility on the April 2016 calls is 76, while the May 2016 calls are at 42, so this is an angle to take advantage of, especially on a non-volatile stock. I am giving this trade a 9/10.

Here is how the trade is placed:

Entered Trade

Sell -25 KMX Apr16 52.5 Call

Buy 25 KMX May16 52.5 Call


Requirements

Cost/Proceeds
$1,375.00
Option Requirement
$0.00
Total Requirements
$1,375.00
Estimated Commission
$75.00


Greeks / NBBO

IV
KMX Apr16
52.5 Call
76.21

KMX May16
42.02


NBBO
0.40 – 0.75. Try to pay 0.55 or less for this trade. At a maximum, pay up to 0.58. See the attachment for the profit/loss chart.

KMX NCS 4616

I will post the price to close this trade out tomorrow right before the opening bell.

Update 1: 9:25 am EST:
Pre-market, the stock is up about $1.70/share. It also had a bit of a run-up late yesterday before the markets closed, but nothing major. I am placing the price to close this trade out at $1.50 for now. I will update any changes here, if needed.

San Diego, CA Seminar : Trading Earnings and Weeklies Using Debit Spreads (June 13 -17, 2016)

I will be holding a seminar in San Diego, CA from June 13th – June 17th, 2016 (Monday – Friday) on how to trade Earnings and Weeklies using Debit Spreads. The strategies being discussed and trading are the Neutral Calendar Spread, the Double Neutral Calendar Spread (a synthetic Strangle), Reverse Iron Condor, and Straddles/Strangles.

The cost of the seminar is $799.00 and includes a three (3) month subscription to my Trading Forum (where all earnings and weekly trades are posted) and to my Skype chatroom.

These strategies are neutral-based in that there is no preference for a specific direction a stock moves post-earnings. I have been trading these for many years and have also taught many other traders how to use these profitable strategies.

The Neutral Calendar Spread in particular is a great strategy that can be placed at a minimal cost and brings a very high return on investment. This strategy takes advantage of high Implied Volatility (over-priced options), a lack of a big price move ( it still has wide break-even points), and time-decay. For whatever reason, this strategy is under-used by many traders. During the seminar, I will be teaching this strategy in-depth and what to look for when spotting potential trades. I will also show when it is best to avoid this strategy for earnings an earnings trade. The Neutral Calendar Spread also hold value very well even if the stock moves more than expected post-earnings. For those who cannot trade full-time, this strategy does not require a lot of time management, as companies report earnings either before the markets open or after they close, so it is very easy to set your price to close the trade out well ahead of the bell.

The Reverse Iron Condor is different than the Neutral Calendar Spread in that it does require a stock/security to to make a pre-determined price move, up or down. Choosing the right strike prices is crucial to the success of this strategy. Strike price increments available on a specific security are also very important when using this strategy. What I like about this strategy is it is a lot less expensive to place than the Straddle or Strangle and requires less movement. The potential gains are capped, however, and known at he time of placement. On the same hand, once the security moves past the required strike price(s) to gain maximum return on investment, it can immediately be closed out. I also like to trade this strategy with securities that have weekly options, such as Citigroup (C) and the SPDR Gold Shares (GLD), among others.

The Straddle and Strangle are strategies that require a large price move to profit. A Straddle is when you buy both call and put options with at-the-money strike prices. The Strangle is buying both calls and puts with out-of-the-money strike prices. The benefits of these strategies is that there is unlimited profit potential on the call side and a high profit potential on the put side. When accurately predicting a large price move on the Straddle or Strangle, the ROI can be very significant. The drawbacks of using these strategies is that they are generally a lot more expensive to place than the Neutral Calendar Spread or the Reverse Iron Condor. If you place a Straddle, for example, and the stock fails to move much post-earnings, you will be looking at a significant loss. This is why I prefer to buy longer term expiration dates to give the trade plenty of time to make the necessary move to profit in case it initially does not. While you will pay more for this time-value, I look at it as a security blanket. Using weekly options with the Straddle or Strangle is very risky. Another strategy I use is called the Double Neutral Calendar Spread, which is similar to the Strangle, but can be placed at a fraction of the price. It requires buying two (2) Neutral Calendar Spreads, a call side and a put side, both using out-of-the money strike prices. The strategy is very unique, and while there aren’t a lot of opportunities to trade it, when there are this strategy works great.

The seminar will go into great detail on all of these strategies and we will be trading them live. I guarantee you will leave the seminar with full knowledge on how to trade them successfully. After the seminar, you will have full access to the Trading Forum and my Skype chatroom where I answer any questions you may have throughout the day.

The seminar starts at 5:45 am Pacific Time on Monday, June 13th, 2016 and will meet each day throughout the week at the same time each morning until Friday, June 17, 2016. Each day, the seminar will last until 2:00 pm Pacific Time.. I will be catering breakfast Monday through Friday.

Once registered, I will promptly e-mail you a receipt of payment and for admission to the seminar.

The seminar will be held at the San Diego Convention Center:

111 West Harbor Drive, San Diego, CA 92101

http://visitsandiego.com/

If you have any questions, you can contact me anytime at kmob79@gmail.com

Free Earnings Trade of the Week: Red Hat, Inc. (RHT) – Reports After The Markets Close On Tuesday, 3/22/16

Red Hat, Inc. (RHT) is scheduled to report earnings after the markets close on Tuesday, 3/22/16.

Last quarter, the stock had the following price movement after reporting earnings:

Dec 18, 2015

83.01
83.99
80.45
81.40
7,692,400
81.40

Dec 17, 2015

78.81
79.34
77.66
78.86
2,688,600
78.86

(RHT) can be very unpredictable in terms of price movement post-earnings. A few keys to picking a strategy to use is the amount of movement allowed (up or down), strike price increments available, and the cost to place the trade. On this specific (RHT) trade, I think the Neutral Calendar Spread strategy is the right way to play this trade. The break-even points are very wide, and the price is very good. Even if the stock moves $5.00 + or more either way tomorrow, this trade will still do well and hold value even if it moves more than that, so I consider this trade very low risk with great potential. 9.5/10.

Note: I recommend placing this trade as soon as possible, as the value will most likely increase throughout the day. There is a possibility that the trade can be closed out for a profit by the end of the day if filled early. I will post that at the end of the trade details.

Here is how the trade is placed:

Entered Trade

Sell -25 RHT Apr16 75 Call

Buy 25 RHT May16 75 Call


Requirements

Cost/Proceeds
$1,875.00
Option Requirement
$0.00
Total Requirements
$1,875.00
Estimated Commission
$75.00

NBBO
0.40 – 1.10. Try to pay 0.75 or less for this trade. At a maximum, pay up to 0.85 if late.

If there is an opportunity to close out the trade early (taking less profit) if your order is filled at 0.80 or less, place the closing order out at 1.25 as a day order only.

I will post the price to close this order out tomorrow pre-market, right before the opening bell
RHT NCS 32216
See the attachment for the profit/loss chart.

Update 1: 9:25 am EST: Pre-market, the stock is down about $2.50/share, so using the Neutral Calendar Spread strategy looks very good here. I am placing the price to close the trade out at 1.90 for now. I will update any changes here, if needed.

Update 2: 1:05 pm EST. This trade is looking excellent right now. Time-decay and the current movement is going to increase value quickly. The price to close the trade out is still at $1.90.

Daily Options Trading Strategy (DOTS) Updated List – 3/11/16

Here is the current (4) tier list of the Daily Options Trading Strategy (DOTS), current as of 3/11/16:

Tier 1: AAPL, AMZN, BIDU, FB, GOOGL, LNKD, NFLX, PCLN, TSLA


Tier 2: BA, BABA, TWTR, FIT, UA, CRM, GPRO, C, FDX

Tier 3: BBY, EBAY, STZ, EXPE, CMG, AKAM, DIS, BWLD, PYPL

Tier 4: HD, IBM, MNST, ULTA, SQ, CAT, PX, GDDY, UPS

If you have any questions about the strategy or stock options in general, you can e-mail me anytime at kmob79@gmail.com

A Look Ahead To Earnings Next Week, 3/14/16 – 3/18/16

Next week provides plenty of opportunities with earnings trades. Among the companies reporting are the following stocks I will be looking to trade:

Monday: JMBA

Tuesday: PLCE, DSW, FDS, JASO, ORCL

Wednesday: ATU, CMCM, CLC, FDX, GES, JBL

Thursday: ADBE

Friday: TIF

Free Earnings Trade of the Week: Square, Inc. (SQ) – Earnings/Long-Term Trade – Expires June 2016

Square, Inc. (SQ) is scheduled to report earnings after the markets close on Wednesday, 3/9/16.

This trade is both an earnings and long-term trade combo. It expires in June 2016. I have been meaning to buy some (SQ) calls for a while, and with earnings due after the bell today, see an opportunity here. Even if the stock should drop post-earnings, the time-value of this trade will hold value in these calls. If the stock should make a significant move upward, this trade has the potential to turn out extremely well. 9/10.

Entered Trade

Buy 10 SQ Jun16 11 Call


Requirements

Cost/Proceeds
$1,650.00
Option Requirement
$0.00
Total Requirements
$1,650.00
Estimated Commission
$15.00

NBBO
1.35 – 2.00. Try to pay 1.65 or less for this trade. At a maximum, pay up to 1.80. I will post the STC tomorrow before the opening bell.

Update 1: 3:55 pm EST. I I am in this trade at 1.65. Already a nice gain, could sell. But with this amount of time left, June exp. will keep it.
Update 2: 9:25 am EST 3/10/16 : Pre-market, the stock is up about $0.20/share. The earnings report was good, and I see this stock continuing to rise. With a lot of time-value left on this trade, I am placing the STC at $4.00 on the calls, as I see the stock heading towards $15.00/share in the near-term future. I will be updating this trade periodically if there are any changes to the STC.
Update 3: 3:34 pm EST 3/10/16: STC still at $4.00. The stock dropped a little bit, nothing significant. Should make a move upward soon. I do not recommend selling anything short of $3.00 if you do not plan to get $4.00.

Free Earnings Trade of the Week: Intuit Inc. (INTU) – Reports After the Markets Close on Thursday, 2/25/16

Intuit Inc. (INTU) is scheduled to report earnings after the markets close on Thursday, 2/25/16.

Last quarter, the stock had the following price movement after reporting earnings:

Nov 20, 2015

106.28
108.00
101.17
103.20
6,622,300
102.88


Nov 19, 2015

96.93
97.68
95.79
97.42
3,985,900
97.12

This stock has a history of initially making a somewhat large price move post-earnings, but then settles down to average a moderate move only. I am going to take advantage of this here, using a Neutral Calendar Spread. The current price to pay for this trade is excellent, especially on a higher-priced stock, if you can get it at my recommend price to pay for it. This trade has the potential to make a great ROI, and carries low risk, as it will retain value either way. 10/10.

Here is how the trade is placed:

Entered Trade

Sell -30 INTU Mar16 100 Call

Buy 30 INTU Apr16 100 Call


Requirements

Cost/Proceeds
$1,800.00
Option Requirement
$0.00
Total Requirements
$1,800.00
Estimated Commission
$90.00

NBBO
0.30 – 0.90. Try to pay 0.60 or less for this trade. At a maximum, pay up to 0.66.

See the attachment for the profit/loss chart.

I will post the price to close this trade out tomorrow morning, right before the opening bell.

INTU NCS 22516

Update 1: 9:25 am EST:
Pre-market, the stock isn’t moving much at all, ideal for the Neutral Calendar Spread strategy. I am placing the price to close this trade out at 1.80. I will update any changes to this here, if needed.

A Look Ahead To Earnings Next Week: 2/29/16 – 3/4/16

Here are the stocks I will be looking at to possibly trade next week for earnings. (Note: my earnings strategies are debit spreads that are neutral-based, such as the Neutral Calendar Spread, Reverse Iron Condor, Strangle/Straddle, and with occasional long positions placed). These strategies allow me to take a non-biased approach as to direction, where a trader can profit no matter which way the stocks moves after reporting earnings.

Monday:
BSFT,CROX, GLP, LL, WDAY

Tuesday:
BGFV, BOBE, DKS, DLTR, JKS, PGR, ROST, TIVO

Wednesday:
JOBS, COST, BREW

Thursday:
AVGO, BURL, CIEN, DMND, TFM, JOY, NMBL, PRFT, SWHC, SSI, KR, TSL, WING,

Friday: BIG

Daily Options Trading Strategy (DOTS) Updated List – 2/22/16

Here is the current (4) tier list of the Daily Options Trading Strategy (DOTS), current as of 2/22/16:

Tier 1: AAPL, AMZN, BIDU, IBM, GOOGL, LNKD, NFLX, PCLN, TSLA


Tier 2: BA, BABA, TWTR, FIT, FB, CRM, GPRO, C, FDX

Tier 3: BBY, EBAY, STZ, EXPE, CMG, AKAM, DIS, BWLD, PYPL

Tier 4: HD, COST, MNST, ULTA, JNUG, CAT, PX, GDDY, UPS

If you have any questions about the strategy, you can e-mail me at: kmob79@gmail.com

Weekly Citigroup (C) Reverse Iron Condor Trade – Expires Next Friday, 2/26/16

Each week on Thursday morning, I place my Reverse Iron Condor trades. Citigroup (C) for years has been one of my favorite stocks to use this strategy with. A Reverse Iron Condor is a combination of a Bull Call Spread and a Bear Put Spread. There are 4 “legs” to this strategy. Last week’s Citigroup trade closed out a a 100 % profit, as is usually the case. The key to this strategy is to place it each week, as the compounded gains yearly add up to a very nice profit. I do not recommend trading it one week, and then skipping the next. These trades are also very inexpensive to place, so a great source of additional income weekly, and they require little monitoring. Once the stock starts moving in a specific direction, I will post the price to close out the profitable side of the trade.

Here is how the trade is placed:

Entered Trade

Buy 100 C FebWk4 38 Put

Sell -100 C FebWk4 37 Put

Buy 100 C FebWk4 41 Call

Sell -100 C FebWk4 42 Call

Requirements

Cost/Proceeds
$3,600.00
Option Requirement
$0.00
Total Requirements
$3,600.00
Estimated Commission
$600.00


NBBO
0.23 – 0.49. Try to pay 0.36 or less for this trade. At a maximum, pay up to 0.39. See the attachment for the profit/loss chart.

Q C RIC 21816

Update 1: 8:25 am EST 2/22/16. (C) is up 0.70 pre-market. I am placing the price to close the call side of this trade (bull call spread) at $0.85. On the put side, leave that open for now. There are times where both sides of the trade can profit weekly, and you do not want to sell one side too early.

Update 2: 3:05 pm EST
: STC on the put side at 0.70. On the call side, place the STC at 0.60, day order only.Will update this trade pre-market tomorrow morning

Update 3:
2/24/16: STC at 1.00 on the put side of this trade. On the call side

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